Avanti Communications Share Discussion Threads

[bulltradept] 21/1/2016 10:01

wow just wow.

[geheimnis2] 21/1/2016 09:38

I'm afraid TWs warnings here have a ring of truth (look at the yield on the bonds)

I'm a former holder here. Sold a while back for around 2 quid (a loss)

[nw99] 21/1/2016 09:22

Bought in here

[bulltradept] 21/1/2016 09:05

Now below £1.00. Mmmmmm

Something's not right and I don't think you can put this down to Macro factors..

[value viper] 21/1/2016 08:57

i assume co aware it has halved in a few days ?!? errr....normally gets a statement out when things like this happen.....bit concerning of course
shorters cleaned up...............to be fair.....what next

[hpcg] 20/1/2016 23:02

Well it is likely heading to 0, so yeah, it has to pass through 100.

[bulltradept] 20/1/2016 09:51

Is this heading to a £1.00?

[bwakem] 18/1/2016 16:03

Just closed my short. Probably further to go but it was too tempting to realise the profit.

[hpcg] 15/1/2016 12:17

Have you noticed what is happening to the market in general? At the very least there is multiple compression, which is bad for all high multiple stocks, not least those with unsustainable debts. It could be the start of something worse, which is bad for every single stock.

[gekks] 15/1/2016 12:05

WTF is going on here ?

[nugacity] 05/1/2016 19:42

Oh, I wondered why there was so little info.

I'm not retired - just an OAP - but I am sitting on my shares waiting to feel them move rather than buying more. Good luck, I hope we both come good soon.

[sg31] 05/1/2016 19:27

I got out of NOP a long time ago. We use the NOP board as a chat room for a few friends, we are unlikely to upset anyone with our drivel because the board (and the company) are both dead.

All the best with AVN, I hope it comes good. It just doesn't fit my investment profile now I'm retired.

[nugacity] 05/1/2016 19:07

sg31, do you prefer the falling NOP to the roller coaster AVN or have you dropped both fairground rides?

I'm not a chartist but one of the graphs has a shape that could soar without much imagination. I still hold and still fully expect there to be exponential growth one day - whether I'll live to see it is the big question .... good luck to you but beware of being a future hard luck story.

[sg31] 05/1/2016 11:18

I'm out. I've held since the days of Avanti Screen Media.

The risks have increased and AVN have gone nowhere. I've retired recently so high risk is less appealing.

Good Luck to the remaining holders, I hope you do well.

[jeffian] 05/1/2016 10:24

"Obviously sufficiently strong cash flows are expected later."

Obviously. But where are they? The risk factor at AVN increased when they persistently missed their revenue targets and I take the point made by someone above that it isn't comforting to have 'forecasts' in an opaque form which seem designed to disguise cashflow.

[dangersimpson2] 05/1/2016 09:57

GaryMott,

You cannot put an exact value on company via DCF but you get a good feel on what impact the various assumptions have on valuation. Usually you use conservative assumptions and agressive assumptions and see what the range is.

In Avanti's case my realisation was that the real numbers were often a lot worse than the management presented and in particular the numbers were not showing the economies of scale that were promised i.e. COS as a % of revenue was pretty static. The original analysis showed that (based on the reported figures) under the agressive assumptions the equity was probably worthless if the COS % doesn't improve. In these conditions it's not necessary to do the conservative analysis!

Subsequently on here you said you thought the claimed figure of $2k/MHz/Month was a better figure than 2016Q1 trading statement to use to estimate maximum revenue. Using this and the agressive assumptions then I got a figure of £2.30/share.

But this simply means Avanti is worth £2.30/share if:

- They get 100% utilisation of their assets.
- they experience no pricing pressure from competitors.
- they don't increase their admin expenses.
- they can refinance their debt on similar terms in 2019.
- equity investors are happy with a 10% pa return for the risk they are taking.

Quoting this figure without understanding what it is based on doesn't help your investment case.

To me those agressive assumptions, particularly the last one, are unrealistic. I hope it is to you too otherewise you should be holding Avanti debt not equity becasue you would be higher up the capital hierarchy for the same return. Hence I am definitely not saying Avanti is worth £2.30.

Likewise I'm not saying 15% is the right discount factor either but if you understand these things you'll know it is probably a better ball park than 10% which is intentially agressive.

Again we can never be certain of these things since we are modelling the future but your claim that using $2k/Mhz/month justifies the current valuation is true only in the most agressive of assumptions. When people need perfect execution under agressive assumptions to justify current valuation I will take the other side of that trade every day.

Danger

[weatherman] 05/1/2016 08:55

ISAT debt is $1.9 bn and they are going to spend $600m on new Ka sats by 2020. AVN is a start up co., which is growing fast. There are no reasons why in the long run they can't sell capacity at the going rate and make a profit as ISAT are doing, even with big debts.

The faithless shorters seem to wish a British company to fail just so they can make a short term profit. This cynicism is ultimately corrosive to the wider economy.

[garymott] 05/1/2016 08:08

dangersimpson2,

AVN is a young and growing company during which it is quite normal to have significant debt due to strong investment. Obviously sufficiently strong cash flows are expected later. Inmarsat by comparison was formed in 1979.

You, not me, chose the 10% discount factor for your NPV analysis when you published your original article. Now in post 1886 you are saying this is unrealistic. Excuse my scepticism but it's quite easy to suggest that this is because 10% no longer gives the same conclusion to support your short case.

Using your original assumptions and my improved maximum revenue argued in post 1876, you conclude AVN to be valued at £2.30/share. You have actually stated it yourself in post 1886:-

"What matters to the investor today is the NPV of the cashflows. Assuming 10% utilisation ramp up per annum to full utilisation, 60% COS, $35m admin expenses then the NPV10 = $1.16b or $520m market cap or £2.30/share."

[value viper] 05/1/2016 08:00

fair enough

[leonasdad] 05/1/2016 04:18

Social Media and bulletin boards are a barometer for sentiment for those connected online and offline. The climate shift in awareness and learning enables existing communications technology to meet consumer needs for data access.

The trend to bring on additional terrestrial networks by lease is evidence of too many ICT workers and too much money in circulation. The market for Avanti communications network is based on investors non compliance with existing network providers, due to barriers of entry.

The lease terms and conditions, involve trust in the hardware owners choice of platform installed on existing satellite servers. In other words more of the same ole, same ole.

There are enough digital media outlets and platforms already, the BBC broadcast network is the one, content managers should work with imo

[buywell3] 05/1/2016 03:26

AVANTI COMMUNICATIONS GROUP PLC - AVN
buywell2 - 06 Aug 2014 - 14:15:33 - 407 of 507
Good for them


Chartwise 140 to 145p looks about it , a few pence lower than the 150p last low

[hpcg] 04/1/2016 21:57

Cash is for H4 - you can't count H4 revenue and also credit the cash needed to build and launch H4 in the first place!

[value viper] 04/1/2016 20:52

Have u tripped out their sizeable cash balance in your EV calculation ?

[dangersimpson2] 04/1/2016 15:03

AVN is trading at 17 times EV/historic sales & 11 x EV/fwd sales.

6 times fwd sales doesn't even cover AVN's debt.

[hpcg] 04/1/2016 14:36

Inmarsat makes an operating profit every year and has 6 times interest cover. It generates free cash with capex being about 60% of operational cash flow. Debt is about 1/3 of equity. Even then it is expensive (not a buy for me). Strong chart though so nice to own for holders who bought lower.

So AVN is almost the opposite of ISAT?